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A place for thought, progress, and dissent.

Thursday, November 03, 2005

US Health care sucks. (duh!)

I always run into people who think that our heath care system is great, and that any kind of nationalized health care is doomed to fail. A new survey finds that the US is actually in pretty bad shape (surprise!).

I'd link directly to the survey or the article, but Kevin Drum sums it up nicely.

Additionally, I always think of all the costs associated with processing insurance, from employees to paperwork, there is a lot of money being wasted (and going to big insurance companies) that could be spent on actual care.


At 8:21 PM, Anonymous Anonymous said...

Wow… there are all kinds of things to say about this one…

First, in actually looking at the study, it is apparent that there is quite a bit of misinformation and misinterpretation coming out. It is certainly the case that the United States’ health care system is flawed. This is probably best explained as a combination of our advancement and our legal system. Most of the articles written on this research fail to note for example that United States citizens have significantly greater access to specialists than any other country in the study save Germany, whose citizens pay 14% of their income directly for health care and whose government is actively trying to reform their system. Furthermore, many of the world’s largest health care development firms, such as pharmaceutical and medical technology companies are based in the United States.

It is important to note the role that lawsuits play in the US health system. The Wall Street Journal notes that “defensive” medicine – referring to doctors ordering tests they consider unnecessary to protect themselves in the event of a lawsuit – may cost the US as much as 100 billion annually. Furthermore, 80% of lawsuits brought for medical malpractice do not involve negligence at all, and juries find 1 in 4 doctors culpable even when experts believe the doctor did nothing wrong.

It is also very relevant to note that while the United States is looking at ways to make its health care system more accessible, most other countries in the study are trying to convince their populations that their current health systems cannot be maintained. In Canada for example, it has been noted that based on current trends, their system will, in 2040, consume all of the resources of each province. Furthermore, the study shows that Canada generally performed worse than the United States.

Certainly, health care in the United States has many faults. Hopefully, more advanced technology will help to eliminate many of the administrative errors that cause problems. However, to make claims that the United States should emulate more socialist countries and have the government manage health programs is equally faulty. Governments are absolutely terrible at running service based businesses, which is exactly what health care is all about. Consider the fact that right now some percentage of your income, whether you know it or not, goes to your health coverage. This coverage is provided in a competitive market, meaning that different companies are competing with your firm for who can provide the desired coverage at the least cost. If the federal government were to take over, the service costs do not change, only the administrative structure. Instead of competing firms trying to minimize costs and attract customers, the US government would have no incentive to provide efficient services.

Note first that if the federal government took over health care, it would not provide this service for less. Actually, as a percentage of your compensation package, you would very likely pay far more. Remember the Post Office example – think of how much the USPS charges to send a package – it is far more than UPS or FedEx. This is not a surprise by any means considering the Post Office is a non-competitive business; they are supplemented by the government regardless of performance. Next, realize that the service availability is far greater in a competitive environment. The US government would have to diminish services in order to make such a system solvent given that it will necessarily be more egalitarian. Traditionally, the government only assists the very needy, those who qualify for Medicare and/or Social Security; if these programs were opened to the general public, those who can afford to not use them would have no reason to find their own coverage. In Germany, only a quarter of those who are financially eligible to find their own coverage do so. The reasoning is of course obvious – why would you pay for your own coverage when other people can do it for you? In a competitive environment, it is best not to create a fully equal system. Historically, there are few examples of such a method doing anything other than providing the worst service at the highest cost. Also, remember that free markets are in theory the most fair of any form. Many think of fairness as equality, but here the term refers to the ability to make an equilibrium exchange; government involvement usually limits such methods. This is largely the effect of a minimum wage for example.

Finally, remember that the study in question relied solely on user response of those who were treated. There is naturally some response-bias in this method. We do not know, for example, if the German population feels their system is fundamentally better and is therefore significantly less likely to respond negatively regardless of their experience. This may sound far-fetched, but it is by no means outrageous. Bias is a very difficult thing to dispel in survey research. By not looking at more objective measures, the study is quite limited.

The crisis in the United States does not require fundamental and drastic change. However, some things do need to be done to alleviate the problems in the system. First and foremost is a medical court that can realistically fast-track medical cases. Such a court should more readily dismiss faulty claims more bring some predictability and stability to trials. If insurance companies could know, for example, that a mistake will result in a fine and a false accusation will be dismissed, they could drastically lower costs. Legal reform is the primary need in the US medical system, not systemic change. Finally, the government should likely work directly with HMO’s to create a financially soluble method of providing health coverage to individuals at some very low level of income, perhaps using the poverty line as a distinguishing point. This way, assistance to the very needy can be provided while still maintaining a fundamentally competitive system.

Ok… I don’t have any more time… Just the first response…

At 2:09 AM, Blogger Sara said...

although our healthcare system has some of the greatest resources, our insurance companies run entirely too much of the show. all i say is that there shouldn't be so much bureaucracy involved in keeping people healthy.

and the only way to prevent doctors from defensive medicine is to revise our blaming culture that abuses the legal system.

oh and finally...over 25% of the cost of insurance goes into the paperwork....yeah...that's when you know this world is messed up.

grrrrrr...don't even get me started

At 10:54 PM, Anonymous Anonymous said...

There will necessarily be a lot of beurocracy in something like health care – that’s just how it is… It’s really a question of who you want involved in that beurocracy. Personally, I would choose competitive companies over the government any day. I am quite positive that if the government were in charge, administrative costs would be well over 25%.

I’m not sure what to say about the idea of blaming our culture for abusing the legal system. In my mind, that would be no different than blaming our culture for producing murderers. Sure, there’s something wrong with the US in that we seem to have a disproportionate number of murderers out there, but I would never have the police stop working and instead focus on culture. The point is simply that it is not easily possible to fix the culture, so we need institutional structures that mend some of the deficiencies we have – such as a propensity to sue.

At 11:26 PM, Blogger Daniel said...

Anonymous, you have some points, but I don't really agree with many.

First, I agree that this study is small, inconclusive, and the like, but it raises good points. Real discussion seems to be lacking in this country with each side claiming to know what's fact, and they contradict.

Second, you talk about "defensive" medicine, but an even more important issue is "preventative" medicine. I can't imagine how many costly and dangerous procedures could be avoided with regular, thorough checkups, and a national plan for preventative heath care. I would love to see a study with numbers on this.

Third, let's say we reform our legal system to avoid these lawsuits. We'd still have a crappy health care system. Lawsuits *may* be a problem, but it is certainly nothing more than a symptom of bigger problems. We need to focus on the disease, not the symptoms. (again, preventative medicine...fix problems before the lawsuit stage).

Fourth, the biggest difference between the US and more socialized systems, IMHO, is the idea of treatment being a right vs. a privilege. I think it should be a right, and not just emergency care, but regular check-ups and basically everything non-cosmetic.

I have more, but I'll save them for now. Love the discussion!

At 8:47 PM, Anonymous Anonymous said...

I know this thread is really old, but I stumbled across it while looking up some other stuff about U.S. health care. I just couldn't resist responding to the comment above: Remember the Post Office example – think of how much the USPS charges to send a package – it is far more than UPS or FedEx.

This is a classic tactic of stating something that sounds reasonable (assuming that most people will not bother to verify the actual facts), and then using it to exemplify the remainder of an argument. Unfortunately, the above statement is just not true. A simple lookup on the respective websites indicates that sending a 5-pound package from Baltimore to Seattle is (as of this date): $9.94 via parcel post ($3.51 if sent media mail) vs. $11.57 via UPS Ground. Both give an estimated 7 day transit time.

Personally, I give little credence to an argument based on an underlying assumption that only took 2 minutes to invalidate.

At 8:00 AM, Blogger Stacey Sharp said...

You mean that US health has been sucked on Obama ruling or clinton ruling?

Stacey Sharp
real hcg drops


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